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Kraton Performance Polymers (KRA) shares rallied 6.6% in the last trading session to close at $37.85. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 0.3% loss over the past four weeks.
KRA’s rally is largely driven by the U.S. Environmental Protection Agency’s (EPA) approval of its BiaXam sulfonated block copolymer for use in specific applications in Georgia, Utah and Minnesota. The Section 18 emergency exemption by the EPA will allow Delta Air Lines to use BiaXam in specific applications across these states for protection against the coronavirus.
Price and Consensus
This specialty chemical company is expected to post quarterly earnings of $0.50 per share in its upcoming report, which represents a year-over-year change of +85.2%. Revenues are expected to be $429.8 million, up 0.6% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Kraton, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on KRA going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
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